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Assignment 2




1. A manufacturing company produces luggage. At the end of the year, its annual costs;relating to quality are as follows;Inspection at the end of the production process: $20,000;Scrap from the production process: $18,000;Design work for product improvement: $24,000;Total costs related to customer complaints: $40,000;Employee training: $12,000;Incoming raw material inspection: $10,000;First, classify each of the above as prevention costs, appraisal costs, internal failure costs;or external failure costs.;Next, suppose that the company has determined that if they increase employee training;costs by $15,000, they expect to reduce all failure costs by 20%. Should MNO Company;increase their training costs? Show your calculations and explain.;2. Determine the total cost of purchasing and owning a car over the next 5 years;given the following information and assuming that you will drive it 15,000 miles;per year;- Purchase price of your new Kia is $20,000. You put 20% cash down and;finance the rest over five years with total financing costs equaling $2,400. At the;end of year 5 you can sell it for $3,500.;- You live in Massachusetts so your sales tax rate is 6.25% on the new vehicle;(sales taxes are already factored into all of your other costs), your annual;registration fees are $100, your annual inspection fees are $60, and your annual;excise taxes are expected to average $160.;- Gasoline is estimated to cost $3.50 per gallon and the car gets an average of;25 miles per gallon.;- Your annual cost of parking and tolls is $3,000, your annual auto insurance is;$2,000, and you can expect at least one minor accident over the next five years;with your insurance deductible being $500.;- Tires cost $200 each and must be replaced every 35,000 miles.;- Oil changes cost $55 every 3,750 miles. Minor tune-ups are done every 15,000;miles and cost $300 each, including the oil change. Major tune-ups are done;every 30,000 miles and cost $600 each, including the oil change and the minor;tune-up work.;- Wheel alignments, brakes and suspension repairs are estimated to be required;every 20,000 miles and will cost $250 each.;- A new battery will be needed every three years at $100.;- You will have to replace the muffler every 36,000 miles at a cost of $200 each.;- Other repair work, such as to the electrical system, alternator, windshield;wipers, bulbs, etc. is expected to total $750 over the life of the vehicle.;Calculate your budgeted cost per mile of purchasing, owning, and driving this;vehicle over the five years. Is it worth owning the car or is it better to use public;transportation instead? Explain.


Paper#35281 | Written in 18-Jul-2015

Price : $17